Anilas, Inc. v. Kern ( 1986 )

Per Curiam.

The sole issue presented in this appeal is whether the exercise of jurisdiction over the appellee Elvira Kern by the District Court of Saline, Kansas was proper under the Due Process Clause of the United States Constitution. As the United States Supreme Court recently stated: “The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ * * * By requiring that individuals have ‘fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign,’ * * * the Due Process Clause ‘gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit’ * * Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 471-472 (citations and footnote omitted).

In determining whether a state court may properly exercise personal jurisdiction over an out-of-state defendant, the primary question is whether the defendant purposefully established “minimum contacts” within the forum state, International Shoe Co. v. Washington (1945), 326 U.S. 310, at 316, and “purposefully availed] itself of the privilege of conducting activities within the forum state.” Hanson v. Denckla (1958), 357 U.S. 235, 253. “This ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, * * * or of the ‘unilateral activity of another party or a third person[.]’ ” Burger King Corp., supra, at 475 (citations omitted.)

In the instant case, the record reveals that all negotiations prior to the signing of the lease agreement were conducted between Dan Kern, as the president of D.K.E., and representatives of Anilas. Elvira Kern’s only apparent participation in the formation or performance of the lease occurred when she was called into the meeting between her husband and an Anilas representative and was told by her husband to sign the lease as the co-guarantor thereof. After signing the lease, Elvira Kern apparently had no further dealings with Anilas until the legal proceedings concerning D.K.E.’s default on the lease were instituted.

Appellant Anilas emphasizes the presence of a provision in the lease agreement, which provided:

“9. If Lessee shall fail to pay any rental as herein provided when the same is due and payable, or if Lessee shall default in performance or shall fail to observe, keep or perform any other provision of this Lease required to be observed, kept or performed by Lessee, then in such event, Lessor at its sole option, and in addition to and without prejudice to any other remedies hereunder, may terminate this Lease and/or enter upon Lessee’s premises and without any court order or other process of law may repossess and remove said property either with or without notice to Lessee. Any such default in performance shall be deemed to be a breach of this contract, and the breach shall be deemed to be made at Salina, Kansas. Any such repossession shall not constitute a termination of this Lease unless Lessor so notifies Lessee in writing, and Lessor has the right, at its sole option * * * [to] * * *.” (Emphasis added.)

Anilas contends essentially that the foregoing provision should be interpreted as a choice of forum provision and that by signing the lease, Elvira Kern expressly consented to the jurisdiction of the Kansas court. We do not find Anilas’ argument to be persuasive.

First, we note that an “* * * individual’s contract with an out-of-state party [does not] alone * * * automatically establish sufficient minimum contacts in the other party’s home forum * * Burger King Corp., supra, at 478. Rather, “* * * [i]t is these factors — prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing — that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.” Id. at 479.

As discussed above, Elvira Kern had no prior negotiations with Anilas, and the record reveals that Elvira apparently contemplated only that she would serve as the co-guarantor of a lease agreement — woi that she would have any future business dealings with Anilas or that she would personally participate in the performance of the lease. Further, the provision alleged by Anilas to be a “choice of forum” clause cannot clearly be construed as such. The provision does not expressly state that the lessee or the guarantors of the lease agree to be subject to the jurisdiction of the Kansas courts, but it merely provides that any breach will be “deemed to be made at Salina, Kansas.” While such a provision may, in some cases, be considered a “choice of law” clause that will often control in a determination regarding the applicability of the chosen state’s law to a dispute over the agreement, see Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St. 3d 436, such clauses have only a limited effect as one of many factors that must be weighed in determining whether a defendant has “purposefully established minimum contacts” within a particular forum.

In this case, the provision in question stands alone as the only factor which would support Anilas’ view that Elvira Kern purposefully established minimum contacts within the state of Kansas. We find this lone factor insufficient to show that minimum contacts existed in this case. In reaching this decision, we also note that Anilas’ “* * * interest in obtaining convenient and effective relief,” World-Wide Volkswagen Corp. v. Woodson (1980), 444 U.S. 286, 292, apparently was not the motivation behind its pursuit of the action in the Kansas district court by which it obtained a default judgment against Elvira Kern. For reasons known only to Añilas, it first brought suit in Ohio against Dan Kern and D.K.E., ultimately obtaining a judgment against the defendants therein. Añilas then filed suit for fraudulent conveyance, again in Ohio, against Elvira Kern. While this action was pending, Añilas filed the action in Kansas by which it obtained a default judgment. Finally, Añilas sought enforcement of this default judgment against Elvira Kern in the pending fraudulent conveyance action in Ohio. Based on this scenario, it appears that Elvira Kern’s burden of defending an action in Kansas was significantly greater than any burden Añilas might have faced if it had pursued all of its actions against Elvira Kern in Ohio.

Based upon all of the foregoing, we hold that Elvira Kern did not “purposefully establish minimum contacts” within the state of Kansas, the District Court of Saline did not have personal jurisdiction over Elvira Kern, and the default judgment granted to Anilas by the Kansas district court was obtained in violation of Elvira Kern’s right to due process under the United States Constitution.

Accordingly, the judgment of the court of appeals is affirmed and the cause is remanded to the common pleas court for further proceedings consistent with this opinion.

Judgment affirmed.

Celebrezze, C.J., Sweeney, Locher and C. Brown, JJ., concur. Holmes, Douglas and Wright, JJ., dissent.